Customer Relationship Management (CRM) Chapter 3 IT for customer relationship Management Learning Objectives The origins of CRM technology The size and dynamics of the market for CRM application software The structure of the CRM ecosystem The most important attributes of an effective technology architecture for CRM The main application areas of CRM The role that analytics plays in CRM technology How IT supports the primary stages of the CRM value chain.

CRM Architecture Effective CRM The way in which the system is constructed, or the ‘architecture’. Unlike purely internal systems, CRM systems must be able to operate in the office, out of the office and over the web. They must tie together multiple communication channels each using very different technologies (web, , telephone). And they must perform well enough and be flexible enough to suit a constantly changing, potentially growing user community. Not only does the CRM architecture have to deal with communication and performance issues, it also had to support the relationship focus of CRM. While it is relatively straightforward to model the relationships between warehouse and production floor in the back office, the relationship modelling challenges of CRM are far more complex

Multi-Channel CRM: Two perspectives on multichannel CRM have developed since the early 1990s: Multiple communication technology channels Multiple organizational touch points. The CRM technology is aimed at consolidating these channels into a single view. The challenge here is that customers may choose to: Browse your website for information you for pricing Call you to discuss discounts Expecting consistency across the whole dialogue. Multichannel technology is necessary to deliver to the customer a feeling of recognition, and consistency of service over all stages of the communication process.

Communication Technology Channels: Customer chooses to communicate with the organization by: Telephone Webchat or face-to-face CRM is designed to track and manage a consistent dialogue that reflects the value of the customer.  Strategically significant? To be effectively implemented, universal queuing requires the integration of the communications infrastructure (telephone, and web systems) with the CRM application (source of customer value metrics)

Contact management for improved customer profitability The National Australia Bank (NAB) was an early adopter of CRM, with the bank designing a formal system for developing relationships with customers. It knew the profitability of customers as early as Since this time the bank has shifted its focus to become more customer centred and build more profitable relationships with customers. In achieving this goal the NAB has undertaken a series of CRM initiatives, such as segmenting its business and consumer customers into six segments and implementing a technology called ‘Relationship Optimiser’ developed by NCR to manage the frequency, content and channels of interaction with its customers. These initiatives have proven to be successful. The bank reports that five of the six segments became more profitable within the first 18 months of implementing these initiatives.

Useable Usability describes how easy an application is to navigate or use. High usability applications (i.e. high ‘ease of use’) are intuitive and require minimal effort to reach the desired outcome High performance Performance is a function of many technologies; all must be in alignment to deliver a highly performing system. A CRM application running on an extremely fast network will still be slow if the database is overloaded. Flexible An application’s flexibility determines how many alternatives are available to the user at any given time; these alternatives are often implemented through hyperlinks, buttons or screen tabs. A highly flexible application will have many such links, and will not require specific processes to be followed. The customer will not be told ‘I’m sorry, but I can’t do A until I do B’. Scaleable architecture As the CRM system grows, and is used by more internal and external people, the scalability of the system becomes important.

Channel integration at Dow Chemical Dow Chemical, a leading science and technology organization, handles tens of thousands of customer enquiries each day across a large number of channels such as face-to-face, telephone, and the Internet. However, customer information being received through these channels was rarely consolidated, and without a comprehensive view of its customers Dow had difficulty in delivering consistent levels of service and in cross-selling other products and services. To address this problem Dow implemented a major CRM strategy utilizing Siebel software in conjunction with a new call centre. The implementation of the strategy involved substantial redesign of Dow’s operations and IT infrastructure. The management consulting firm Accenture was also involved in implementing the strategy, which took 18 months to complete.

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